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The dog that barks doesn’t bite: coverage and compliance of sectoral minimum wages in Italy

Author

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  • Andrea Garnero

Abstract

This paper provides a comprehensive portrait of the level and compliance with sectoral minimum wages in Italy between 2008 and 2015. The results show that wage floors in Italy are relatively high both in absolute terms and relative to the median wage. However, non-compliance rates are not negligible: on average, around 10% of workers are paid 20% less than the minimum wage established in their reference collective agreement. Non-compliance is particularly high in the South and in micro and small firms, and it affects especially women and temporary workers. Overall, wages in the bottom of the distribution appear to be largely unaffected by minimum wage increases. More effective enforcement practices are therefore needed to safeguard a level playing field for firms and ensure that minimum wage increases are effectively reflected in pay increases for workers at the bottom of the distribution. JEL Classification: J08, J31, J52, J83.

Suggested Citation

  • Andrea Garnero, 2018. "The dog that barks doesn’t bite: coverage and compliance of sectoral minimum wages in Italy," ULB Institutional Repository 2013/268484, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/268484
    Note: SCOPUS: ar.j
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    2. Giovanni Tonutti & Andrea Garnero & Gaia Bertarelli & Monica Pratesi, 2024. "The local distribution of in-work poverty and sectoral employment: an analysis of local dynamics in Italy," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 33(3), pages 973-998, July.
    3. Claudio Lucifora & Daria Vigani, 2021. "Losing Control? Unions’ Representativeness, Pirate Collective Agreements, and Wages," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(2), pages 188-218, April.
    4. Bernardo Fanfani, 2019. "The Employment Effects of Collective Bargaining," Working papers 064, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    5. Marianna Belloc & Paolo Naticchioni & Claudia Vittori, 2023. "Urban wage premia, cost of living, and collective bargaining," Journal of Economic Geography, Oxford University Press, vol. 23(1), pages 25-50.
    6. Lucifora, Claudio & Origo, Federica, 2025. "Rigid yet resilient: Firms’ margins of adjustment to demand shocks in regulated labour markets," Labour Economics, Elsevier, vol. 94(C).
    7. Tito Boeri & Andrea Ichino & Enrico Moretti & Johanna Posch, 2021. "Wage Equalization and Regional Misallocation: Evidence from Italian and German Provinces [“Regional Wage Disparities and Migration.”]," Journal of the European Economic Association, European Economic Association, vol. 19(6), pages 3249-3292.
    8. Andrea Garnero & Claudio Lucifora, 2022. "Turning a ‘Blind Eye’? Compliance with Minimum Wage Standards and Employment," Economica, London School of Economics and Political Science, vol. 89(356), pages 884-907, October.
    9. Effrosyni Adamopoulou & Ernesto Villanueva, 2020. "Wage Determination and the Bite of Collective Contracts in Italy and Spain: Evidence From the Metalworking Industry," CRC TR 224 Discussion Paper Series crctr224_2020_176, University of Bonn and University of Mannheim, Germany.
    10. Andrea Garnero & Claudio Lucifora, 2020. "Turning A Blind Eye? Compliance To Minimum Wages And Employment," DISCE - Working Papers del Dipartimento di Economia e Finanza def085, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    11. Mansoor, Kashif & O'Neill, Donal, 2021. "Minimum wage compliance and household welfare: An analysis of over 1500 minimum wages in India," World Development, Elsevier, vol. 147(C).
    12. Clemens, Jeffrey, 2024. "Minimum Wage Hikes Bring Tradeoffs beyond Pay and Jobs," MPRA Paper 121748, University Library of Munich, Germany.
    13. Smith, Laurence G. & Westaway, Sally & Mullender, Samantha & Ghaley, Bhim Bahadur & Xu, Ying & Lehmann, Lisa Mølgaard & Pisanelli, Andrea & Russo, Giuseppe & Borek, Robert & Wawer, Rafał & Borzęcka, M, 2022. "Assessing the multidimensional elements of sustainability in European agroforestry systems," Agricultural Systems, Elsevier, vol. 197(C).
    14. Bavaro, Michele & Raitano, Michele, 2024. "Is working enough to escape poverty? Evidence on low-paid workers in Italy," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 495-511.
    15. Clemens, Jeffrey & Strain, Michael R., 2022. "Understanding “Wage Theft”: Evasion and avoidance responses to minimum wage increases," Labour Economics, Elsevier, vol. 79(C).
    16. Koch, Andreas & Kirchmann, Andrea & Reiner, Marcel & Scheu, Tobias & Zühlke, Anne & Bonin, Holger, 2020. "Verhaltensmuster von Betrieben und Beschäftigten im Kontext des gesetzlichen Mindestlohns," IZA Research Reports 97, Institute of Labor Economics (IZA).
    17. Adamopoulou, Effrosyni & Villanueva, Ernesto, 2022. "Wage determination and the bite of collective contracts in Italy and Spain," Labour Economics, Elsevier, vol. 76(C).
    18. Gautier, Erwan & Roux, Sébastien & Suarez Castillo, Milena, 2022. "How do wage setting institutions affect wage rigidity? Evidence from French micro data," Labour Economics, Elsevier, vol. 78(C).
    19. Pérez Pérez, Jorge, 2020. "The minimum wage in formal and informal sectors: Evidence from an inflation shock," World Development, Elsevier, vol. 133(C).
    20. Mario Bossler & Ursula Jaenichen & Simeon Schächtele, 2022. "How effective are enforcement measures for compliance with the minimum wage? Evidence from Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 943-971, May.

    More about this item

    Keywords

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    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights

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